ASST CIT 16(2), MUMBAI V. JANAK DILIP DWARKADAS, MUMBAI

ITA 5024/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6361 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 24-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV GUBGOTRA
• Assessee Lawyers: SUNIL M LALA; BHAVYA SANDESH
• Keywords: Earning of tax free income
• Section: 14A; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & SANDEEP GOSAIN (JM) I.T.A. NO. 5024 /MUM/20 1 7 (ASSESSMENT YEAR 20 13 - 14 ) ACIT - 16(2) ROOM NO. 479 4 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. VS. SHRI JAN AK DILIP DWARKADAS 3 RD FLOOR, MULLA HOUSE 51, M.G. ROAD, FORT MUMBAI - 400 001. PAN : AAEPD8303R ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY MS. BHAVYA SANDESH & SHRI SUNIL M. LALA DEPARTMENT BY SHRI RAJIV GUBGOTRA DATE OF HEARING 4 . 2 . 201 9 DATE OF PRONOUNCEMENT 4 . 2 . 201 9 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 6.4.2017 PASSED BY LEARNED CIT(A) - 5, MUMBAI AND IT RELATES TO A.Y. 2013 - 14. THE REVENUE IS AGGRIEVED BY THE DECISION OF LEARNED CIT(A) RENDERED ON FOLLOWING ISSUES : - (A) DETERMINATION OF ANNUAL LETTING VALUE OF PUNE FARM HOUSE PROPERTY . (B) DISALLOWANCE MADE U/S. 14A OF THE I.T. ACT. 2. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE A SSESSEE HEREIN IS AN ADVOCATE AND HE FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING A TOTAL INCOME OF RS. 32.54 CRORES. THE ASSESSEE HAD HELD A PROPERTY IDENTIFIED AS PUNE FARMHOUSE PROPERTY FOR SELF OCCUPATION AND DECLARED ANNUAL LETTING VALUE OF THE SAME AT RS. 1 5,000/ - , BY TREATING THE SAID PROPERTY AS DEEMED TO BE LET OUT. THE ASSESSING OFFICER, HOWEVER, DETERMINED THE ANNUAL LETTING VALUE OF PROPERTY AT 8% OF THE COST OF THE PROPERTY AND THE SAME RESULTED IN AN ADDITION OF RS. 4,21,694/ - . THE LEARNED CIT(A) FOL LOW ED THE DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF M.V. SHRI JANAK DILIP DWARKADAS 2 SONAWALA VS. CIT (246 ITR 177), WHEREIN IT WAS HELD THAT INCOME FROM HOUSE PROPERTY HAS TO BE COMPUTED ON THE BASIS OF SUM RECEIVED BY THE PROPERTY LET OUT YEAR TO YEAR AND AT MUN ICIPAL VALUE AND DIRECTED THE AO TO DETERMINE THE ANNUAL LETTING VALUE BY ADOPTING MUNICIPAL RATEABLE VALUE . 3. THE ASSESSING OFFICER ALSO NOTICED THAT THE ASSESSEE HAS EARNED EXEMPT INCOME , BUT DID NOT MAKE ANY DISALLOWANCE U/S. 14A OF THE ACT. THE ASSE SSING OFFICER TOOK THE VIEW THAT DISALLOWANCE SHOULD BE MADE IN ACCORDANCE WITH R ULE 8D OF THE I.T. RULES AND ACCORDINGLY COMPUTED DISALLOWANCE AT RS. 70.31 LAKHS U/R. 8D(2)(III) OF THE I.T. RULES. THE LEARNED CIT(A) NOTICED THAT THE ASSESSEE DID NOT CLAIM ANY EXPENDITURE RELATING TO INVESTMENT ACTIVITIES IN HIS P ROFIT AND LOSS ACCOUNT. HE ALSO NOTICED THAT THE ASSESSEE HAS DEBITED ALL EXPENDITURE RELATING TO SHARE INVESTMENT ACTIVITY TO HIS CAPITAL ACCOUNT. THE LEARNED CIT(A) FURTHER NOTICED THAT AN IDENTI CAL ISSUE WAS CONSIDERED BY HIM IN A.Y. 2012 - 13 AND HE HAS DELETED AN IDENTICAL ADDITION BY HIM BY FOLLOWING THE DECISION RENDERED BY THE TRIBUNAL IN THE CASE OF ACIT VS. IQBAL M. CHAGLA (ITA NO. 377/MUM/2013). ACCORDINGLY HE DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S. 14A OF THE ACT. 4. AGGRIEVED BY THE ORDER PASSED BY LEARNED CIT(A) ON THE ABOVE SAID ISSUES, THE REVENUE HAS FILED THIS APPEAL BEFORE US. 5. AT THE TIME OF HEARING, LEARNED AR SUBMITTED THAT AN IDENTICAL ADDITIONS WERE MADE BY THE ASSESSING OFFICER IN A.Y. 2012 - 13 ALSO AND THEY WERE DELETED BY LEARNED CIT(A) IN THAT YEAR ALSO. THE REVENUE CHALLENGED THE DECISION OF LEARNED CIT(A) BY FILING THE APPEAL BEFORE THE TRIBUNAL AND THE COORDINATE BENCH, VIDE ITS ORDER DATED 11.5.201 8 PASSED IN ITA NO. 4845/MUM/2016 HAS DISMISSED THE APPEAL OF THE REVENUE. HE SUBMITTED THAT THE FACTS ARE IDENTICAL IN THIS YEAR ALSO AND ACCORDINGLY PRAYED THAT THE ORDER PASSED BY THE TRIBUNAL IN A.Y. 2012 - 13 MAY BE FOLLOWED IN THIS YEAR ALSO. SHRI JANAK DILIP DWARKADAS 3 6. THE L EARNED DR, ON THE CONTRARY, SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER. 7. WITH REGARD TO THE FIRST ISSUE RELATING TO DETERMINATION OF ANNUAL LETTING VALUE OF PUNE FARM HOUSE PROPERTY, WE NOTICED THAT LEARNED CIT(A) HAS FOLLOWED THE BINDING DECIS ION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF M.V. SONAWALA (SUPRA) AND FURTHER WE NO TICED THAT THE VIEW TAKEN BY LD CIT(A) ON AN IDENTICAL ISSUE IN A.Y. 2012 - 13 HAS SINCE BEEN UPHELD BY THE COORDINATE BENCH IN ITA NO. 4845/MUM/2016 (REFERRED SU PRA) WITH FOLLOWING OBSERVATIONS : - 6. WHEN THIS ORDER WAS CONFRONTED TO THE LEARNED SR. DEPARTMENTAL REPRESENTATIVE, HE RELIED ON THE ASSESSMENT ORDER AND PARTICULARLY HE RELIED ON THE CONCESSION GIVEN BY ASSESSEE THAT RATABLE VALUE OF PUNE BUNGLOW BE TAKEN AS 5,46,000/ - . WE FIND THAT THE TRIBUNAL FOLLOWING THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF MV SONAWALA VS.CIT 246 ITR 177 (BOM.) DIRECTED THE AO TO COMPUTE THE INCOME OF THE ASSESSEE FROM HOUSE PROPERTY TAKING THE ALV ON THE BASIS OF MUNICI PAL RATABLE VALUE. WE FIND THAT THE TRIBUNAL HAS DECIDED THE ISSUE AND TAKING CONSISTENT VIEW AND RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE ASSESSING OFFICER ACCORDINGLY. THIS ISSUE OF REVENUE'S APPEAL IS DISMISSED. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE ORDER PASSED BY LEARNED CIT(A) ON THIS ISSUE DOES NOT CALL FOR ANY INTERFERENCE. 8. THE N EXT ISSUE RELATES TO DISALLOWANCE MADE U/S. 14A OF THE I.T. ACT. WE NOTICED THAT THE ASSESSEE DID NOT CLAIM ANY EXPENDITURE RELATING TO SHARE I NVESTMENT ACTIVITY IN HIS PROFIT AND LOSS ACCOUNT . T HE ASSESSEE HAS CHARGED ALL EXPENDITURE RELATING TO SHARE INVESTMENT ACTIVITY TO HIS CAPITAL ACCOUNT. WHEN THE ASSESSEE DID NOT CLAIM ANY EXPENDITURE IN THE PROFIT AND LOSS ACCOUNT RELATING TO SHARE INVE STMENT ACTIVITY, IN OUR VIEW, THE QUESTION OF MAKING ANY DISALLOWANCE U/S. 14A OF THE ACT DOES NOT ARISE. WE NOTICED THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THE COORDINATE BENCH IN A.Y. 2012 - 13 (REFERRED SUPRA), AND IT HAS ALSO TAKEN VIEW THAT THE DISALL OWANCE U/S. 14A OF THE ACT IS NOT CALLED FOR , IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE FACTS, SHRI JANAK DILIP DWARKADAS 4 BEING IDENTICAL IN THIS YEAR ALSO, WE UPHOLD THE VIEW TAKEN BY LD CIT(A) ON THIS ISSUE BY FOLLOWING THE DECISION OF CO - ORDINATE BENCH RENDERED IN THE ASS ESSEES OWN CASE, REFERRED SUPRA. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS BE E N PRONOUNCED IN THE COURT ON 4 . 2 .201 9 . SD/ - SD/ - (SANDEEP GOSAIN ) (B.R.BASKARAN) JUDICIAL MEMBER AC COUNTANT MEMBER MUMBAI ; DATED : 4 / 2 / 20 1 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY // ( SENIOR PRIVATE SECRETARY ) PS ITAT, MUMBAI